Despite modest pullback, retail sales remain strong

Summer is the time Albertans usually spend enjoying the great outdoors. But maybe the heat and smoky air this July had the opposite effect, driving shoppers into the malls, auto dealerships and big box stores. Consumers in this province felt much more confident this summer than they did during the recession.

Total retail sales rang in at $6.76 billion in July (seasonally adjusted). That’s a modest pullback from June, but still nearly 10 per cent more than they spent in July of 2016. Statistically, last summer marked the low ebb of the recession.

The graph below shows how the impact of the downturn cut into consumer spending. Sales plunged in early 2015 and bumped along at a low level for nearly two years. However, as oil prices started to improve in the fall of 2016 and the grip of the recession lightened up, Albertans started opening their wallets at the beginning of 2017. By June, they had reached a record high.

Retailers may be feeling some relief about the return of the shopper, but they are still likely experiencing some strain. It’s true that sales are at a record high, yet they have just returned to where they were three years ago. Meanwhile, over this period, expenses for retailers have continued to rise—and that’s kept profit margins slim.